Home Depot Before Bell - Can 55% Pro Mix From $18.25B SRS and $4.3B GMS Sustain July's +3.3% Comps?

Home Depot (NYSE: HD) reports before the bell, and the print will be judged against a pretty narrow set of expectations after a shaky quarter in August.

Last time out the company missed Wall Street on both earnings and revenue - its first dual miss since May 2014. Adjusted EPS landed at $4.68 versus $4.71 expected, and revenue came in at $45.28 billion against a $45.36 billion consensus. Net income held near last year's level, and revenue was up roughly 5% year-over-year.

Management stuck with its full-year targets then: total sales growth of about 2.8% and comparable-sales growth near 1%. CFO Richard McPhail flagged a lingering "deferral mindset" among homeowners that began around mid-2023, even as he pointed to a handful of encouraging signs - big-ticket transactions (over $1,000) were up 2.6%, 12 of 16 merchandising departments posted gains, and monthly comps improved through the quarter (May +0.3%, June +0.5%, July +3.3%).

What else matters this morning: Home Depot's push into the pro channel is now a big part of the story. The company closed the SRS Distribution deal last year for $18.25 billion and announced a planned purchase of GMS for about $4.3 billion (expected to close by the end of the fiscal year). Including SRS, the mix is roughly 55% pros and 45% DIY. Management said pro and DIY sales both rose year-over-year in the quarter, without handing out exact splits.

There are a few crosswinds worth noting. Foreign exchange hurt comps by about 40 basis points. Tariff talk has been noisy - President Donald Trump delayed some higher tariffs on Chinese goods for 90 days - but Home Depot says most imported inventory in the quarter arrived before the new levies and it hasn't changed its pricing stance. And on interest rates: the company's guidance did not assume any Fed rate cuts.

Operational metrics to watch in the print: comparable-sales growth (U.S. and total), big-ticket trends, pro vs. DIY breakdowns, average ticket and transaction count, and margin commentary tied to tariffs and sourcing. In the prior quarter transactions fell to 446.8 million from 451 million year-over-year, while average ticket ticked up to $90.01 from $88.90.

For context, HD shares closed recently around $394.70, up roughly 1.5% year-to-date - behind the S&P 500's near-10% climb over the same stretch.

So when the numbers hit the tape this morning the market will be parsing not just the headline EPS and revenue but whether the steady improvement in monthly comps can keep rolling and whether the pro strategy is driving durable growth. Will July's momentum hold into the current quarter?